Hudson Global(US:HSON)2022-05-14 20:10Financial Data and Key Metrics Changes - For Q1 2022, the company reported revenue of $51.9 million, a 58% increase year-over-year in constant currency [6] - Adjusted net revenue was $25.6 million, up 107% year-over-year in constant currency, with organic adjusted revenue growth at 86% [6] - SG&A costs were $20.3 million, a 74% increase compared to the same period last year in constant currency [7] - Adjusted EBITDA reached $5.2 million, compared to $800,000 a year ago [7] - Net income was $3 million or $0.97 per diluted share, compared to a net loss of $200,000 or $0.07 per diluted share in the same period last year [7] - Adjusted net income per diluted share was $1.23 in Q1 2022 versus $0.07 a year ago [8] Business Line Data and Key Metrics Changes - The Americas business grew revenue and adjusted net revenue by 220% and 226% in constant currency, respectively, with approximately 75% of this growth attributed to organic growth [9] - Asia Pacific business revenue grew by 30% in constant currency, with adjusted net revenue increasing by 50% [10] - EMEA business revenue grew by 40% and adjusted net revenue by 37% in constant currency [11] - Adjusted EBITDA for the Americas was $3.5 million, up from $0.2 million a year ago [9] - Adjusted EBITDA for Asia Pacific was $2.4 million, an increase from $1.1 million a year ago [10] - EMEA adjusted EBITDA was $0.3 million, slightly up from $0.2 million a year ago [11] Market Data and Key Metrics Changes - The company ended Q1 with $19.5 million in cash and restricted cash [13] - Days sales outstanding (DSO) increased to 47 days at March 2022, up from 41 days at March 2021 [13] - Working capital excluding cash increased to $13.3 million in Q1 2022 from $7.8 million at the end of 2021 [14] Company Strategy and Development Direction - The company aims to grow adjusted EBITDA before corporate costs as a percentage of adjusted net revenue to 20% over the long term [12] - The management emphasized the importance of operational leverage, with adjusted net revenue growing faster than SG&A across all regions [12] - The company is focused on integrating acquisitions (Coit and Karani) to enhance growth and operational efficiency [17] Management's Comments on Operating Environment and Future Outlook - Management noted strong activity levels and robust demand for services across all regions, indicating a continuation of strong trends from the previous year [21][22] - The company is optimistic about future growth, citing strong sales activity and a solid pipeline [18] - Management acknowledged challenges in talent retention but expressed confidence in the current hiring environment [27] Other Important Information - The company had a cash outflow from operations of $2.4 million during the first quarter [14] - The management has a share repurchase authorization of approximately 1.7 million shares remaining [23] Q&A Session Summary Question: Was there anything unusual in the quarter that might not reflect the current state of the business? - Management indicated that Q1 was a continuation of strong trends, with robust business activity levels across regions and some new clients starting aggressively [21][22] Question: Why isn't the company buying back stock given the earnings and cash position? - Management stated that share repurchase is on the agenda and highlighted a history of being opportunistic in reducing share count [23] Question: What are the current labor trends and hiring opportunities? - Management noted strong hiring activity levels and a general shortage of talent in many sectors, which is favorable for the company [26] Question: Are there specific areas of strength in demand? - Management identified strong performance in Australia and the U.S., with health care, financial services, and technology sectors performing well [28] Question: What is the current state of the acquisition pipeline? - Management mentioned that the acquisition pipeline is interesting, with a few more targets than six months ago, but emphasized the importance of finding the right fit [31]